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A company has the following European options available on it. A call option with a strike price of $30 and three months until expiration, and
A company has the following European options available on it. A call option with a strike price of $30 and three months until expiration, and a put option with a strike price of $30 and three months till expiration. Both options are available to buy or sell for $3. The risk free rate is 10 per cent the price of the underlying is $19. A $1 dividend is expected in one month. Are these prices arbitrage free?
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